Starting in 2016, this plant—at EUR 550 million (USD 743 million) the Group’s largest ever foreign investment—will produce two million tons of hot briquetted iron (HBI) annually, a pre-material for the production of high-quality steel. The plant has direct deep-sea access to the Gulf of Mexico and will have about 150 employees. Around half of the environmentally-friendly pre-material will be used at voestalpine production sites in Austria, contributing to the continuing improvement of cost structure and supporting voestalpine’s quality strategy. The other half will be sold to long-term partners in the sophisticated steel production segment. AHMSA has now contractually secured several hundred thousand tons of sponge iron, which is very much in demand. “The execution of this agreement is the beginning of a long-term business relationship. We are delighted to be part of AHMSA’s quality offensive as a key supplier,” says Wolfgang Eder, Chairman of the Management Board and CEO of voestalpine AG.
The Mexican steel manufacturer who is based in Monclóva, near Monterrey, will be using the HBI in a recently installed electric arc furnace, thus enabling production of higher-quality steel grades. It will also make AHMSA independent of the volatile Mexican scrap market. In addition to the high quality of voestalpine's HBI, the geographical proximity and the favorable logistics concept were the primary factors favoring this business relationship. The first deliveries will begin directly after the scheduled launch of operations of the direct reduction plant in early 2016. Long before completion of the plant, a long-term supply agreement for a significant quantity of the available HBI was executed.
Currently, negotiations are ongoing with other interested companies in the NAFTA region and in Europe.